Last week, the 2012-13 budget for the University of Kentucky was approved by the Board of Trustees. The $2.6 billion budget is a reflection of difficult times in higher education, featuring necessary strategic cuts.The athletics department will navigate many of those same challenges, and its budget for the 2013 fiscal year was also approved last week. A review of the budget and UK Athletics’ financial records shows that UK Athletics is a crucial contributor to not only life at the university, but also its financial health.For the sake of transparency, the following is a breakdown of the budget for FY2013 and an overall look at the finances of UK Athletics during Mitch Barnhart’s tenure as Athletics Director.FY2013 budget and student feesDue to escalating costs of tuition, salaries and travel, UK Athletics’ projected budget for FY2013 is $91.9 million, representing an increase from last year. However, by maximizing available revenue streams, UK Athletics was able to balance its budget, and in spite of fielding a 22-sport program – the broadest in the Southeastern Conference – UK Athletics’ budget ranks only in the middle with respect to its conference counterparts.
UK Athletics plays a vital role in cultivating the brand of the university as the whole, but its budget comprises just 3.5 percent of the university’s overall budget. More importantly, UK Athletics balances its budget with the help of no state or university funds, making it one of the few self-supporting departments in the nation. UK Athletics also provides students a low-cost outlet for entertainment and school spirit. UK students pay an annual athletics fee of $38, which accounts for just 0.89 percent of the department’s projected revenue for FY2013. Throughout Barnhart’s tenure, UK Athletics has remained committed to keeping its student fee low while many other schools have relied more and more on students to fund operations.In looking at student fees across the SEC for 2011, UK Athletics compares very favorably. Of its 10 conference peers in USA Today’s college athletics finances database (Vanderbilt is private, so the school does not disclose this information), all but three schools receive more money in student fees than UK. While UK Athletics raised $819,124 in student fees in 2011, seven SEC departments received $1 million or more, including Auburn, which received $4.3 million.Three SEC athletic departments – Arkansas, Alabama and LSU – received no money in student fees, but two were subsidized by the school. In 2011, Arkansas received $1.85 million in university funds and Alabama received $5.25 million. Combining student fees and school funds in 2011, only LSU received less than UK in 2011.With respect to fellow in-state institutions, UK also stacks up well, including with the University of Louisville, the only other department from a BCS conference in the state. For example, UK’s annual student athletics fee of $38 is 62 percent lower than U of L’s $100 fee. U of L also received $39,318,575 directly from the university from 2006-11, according to USA Today. UK has not received a penny over that time.
Contributions to universityEach of the past few years, UK Athletics has donated $1.7 million annually to help fund scholarships and was proud to announce it would extend that contribution beginning in 2012-13. Although the increase does not represent a recurring commitment, UK Athletics will donate $3 million directly to the university in FY2013, which will play a part in funding the Singletary Scholarship program, UK’s most prestigious academic award.Barnhart enacted the increase to help the university at a time of budgetary woes, but it is hardly the first demonstration of the department’s commitment to its partnership with the school. Through 2011-12, UK Athletics has donated $23,836,194.90 to the university in scholarships and royalties during his 10-year tenure. That number will go up with the more than 75 percent increase in the amount of scholarship funding in FY2013.
UK Athletics’ annual donation to the school does not come close to encompassing the department’s wide-ranging contributions. Since Barnhart’s arrival in 2002, the department has contributed more than $100 million to the university. Approximately a quarter of UK Athletics’ FY2013 budget – more than $25 million – will be spent back on campus. The department pays the full rate to the university for 340 scholarships – which equates to $11.7 million – and a $1.8 million University Assessment Fee. Additionally, UK Athletics is responsible for improvements, utilities, maintenance, parking and upgrades to all its facilities. **Note: Expenses for scholarships in FY2013 have not yet been finalized and could increase slightly from the dollar amounts projected above.**Royalties also play a role in UK Athletics’ contributions as the university has received $11.7 million dating back to 2002. The athletics department and university shared 50-50 in merchandising royalties, which totaled $4.5 million in 2011-12. UK Athletics is responsible for all costs associated with managing the licensing program and 90 percent of merchandise sold is athletic-related.
Keeping UK Athletics’ facilities competitiveThe greatest challenge UK Athletics currently faces is the task of providing student-athletes and coaches with state-of-the-art facilities. The department is responsible for pursuing all facility upgrades and new construction on its own, without being granted bonding authority. Barnhart has equated this exercise to buying a house without being able to take on a mortgage.In spite of incurring virtually no debt in doing so, UK Athletics will open new softball and outdoor track and field facilities in 2012-13. National champion men’s basketball will have a new locker room in Rupp Arena, while the headquarters of UK football – the Nutter Training Facility – underwent a massive facelift this summer and debuted new scoreboards and ribbon boards last fall.With those financial circumstances, UK Athletics has taken on a flexible approach, and is continually exploring ways to upgrade its facilities, particularly its football and baseball stadiums.
